BROADGATE V USCIS UPDATE -- PLAINTIFFS' REPLY

Plaintiffs in the Broadgate lawsuit filed their reply to the government's response and opposition. In their 26 page brief, they argue that the Neufeld memorandum regarding employer-employee relationship amends amends the regulations by adding new
or different criteria for determining whether an employer-employee relationship exists and therefore it is a legislative rule requiring notice-and-comment rulemaking. Plaintiffs argue that this memorandum is a legislative rule because it amends a legislative rule by changing the substantive law, it binds agency personnel to use new criteria and directs agency personnel to find that third-party information technology (“IT”) placement services firms, such as the Plaintiff companies, are not United States employers (and thus cannot sponsor H-1B employees), and it affects the public by effectively banning a form of business that had been lawful prior to the issuance of the memorandum.
Plaintiffs also argue that the memorandum is inconsistent with the organic legislation and that the Government has failed to comply with the Regulatory Flexibility Act, among other laws in issuing this memorandum.
The Plaintiffs' response clearly shows how each of the government's arguments fail. The government claims that the memorandum is not final agency action, however since it is binding on the agency and if the court finds it to be a legislative rule, it is by definition a final action. The government also argues that the memorandum is not a legislative rule, which the Plaintiffs show how it changes the prior legislative climate and conflicts with the regulations. The government's argument that the memorandum’s definition of employer-employee relationship is consistent with the organic legislation is clearly without merit as that regulatory definition is very different (and much less restrictive) than the 11-factor test of the Neufeld memo. Finally, the government argued that Plaintiffs have failed to demonstrate irreparable injury sufficient to justify preliminary relief, which is again questionable as their H-1B visas have been denied and will continue to be denied as the memo is binding on all agency personnel.
We're awaiting the judge's decision on this preliminary injunction. I really hope the agency will lose on this one.